What will be discussed:
Why do I need to provide all these documents?
Documents needed for specific situations
What you need to provide if borrowing from the Government or GOCCs
Buying a property costs a lot of money, and borrowing them will require a great deal of paperwork. Potential homeowners should expect to spend some time with their mortgage lenders filling out the application form. But potential homeowners should also prepare to spend some time collecting the documentation the lender will need to verify the application.
At this point, some most of the buyers are more inclined to hire a Financial Broker to take care of all these necessary requirements (see Who we are)
Why do I need to provide all these documents?
Banks and Financial institution or lenders would need to know if you are capable of repaying the loan that you are going to borrow from them, these would be proven by the documents that you will provide if you are qualified to borrow. Lenders would also want to know if you already have previous loans that you have completed or failed to complete, they will be basing the amount you are capable to repay or a bigger interest rate if the risk from you is higher. It is also a guarantee for you to check if you can shoulder all the expenses needed for the loan.
What you need to provide
Finished Application Form
This form will include asking for basic information up to your assets and liabilities, previous borrowings, other properties and its value, purchases and even criminal records. So answering this form will come with preparations and will cost you time. Remember that you be transparent of any debts or assets that you have as it will help the bank know if you are to be trusted with the money that you will borrow or not. Never the less, banks and financial institutions conduct their own background investigation, so whether you like it or not, they are going to find out if there is something you’ve left out.
Identity
You lender will want to verify your identity. Provide all addresses where you have resided for the past two years, and have on hand a driver’s license or some form of photo ID that verifies the current address you provide on the application. Your lender will also likely want your Social Security number.
Income
To verify whether you can handle your home loan financially, banks and financial institutions will want complete information of your income. You’ll need to provide a two-year income history, and the easiest way to do so is to provide copies of your income tax returns for the previous two years. Your lender will also want to verify your current income and will need a copy of your most recent pay stub. That stub should have some sort of personal ID, such as your Social Security number, your employer’s contact information and year-to-date earnings. Your lender may require up to 3 month of pay stubs. If you are self-employed or own your own business, your lender may require more documentation, including specific income tax schedules and profit-loss statements.
Financial Statements
Your lender will want to verify your assets, so you will need to provide copies of all of your financial accounts, including checking accounts, savings accounts, stocks, bonds, mutual funds and any other real estate you might own. For financial accounts, your lender will probably want documentation for the past three months. This could even include canceled rent checks, if your lender wants to see when you pay your rent on a monthly basis.
Credit Report
Your lender will use your credit report to verify your debt and will need your permission to get a copy of it. Your lender will use the report to determine how you’ve dealt with debt in the past, which is a key barometer of whether you will be approved for a loan and what kind of interest rate you might get. Your credit report should include every type of current debt you have, including student loans, auto loans, other home loans and revolving debt such as credit cards. The report includes your payment history, whether secured loans have been paid in full and your current balances.
Purchase Agreement
If you’ve already agreed to buy a home, then you’ll need to furnish your lender with the agreement. The agreement should include the purchase price so the lender knows what amount you are trying to finance.
Documents needed for specific situations are:
Income from child support or alimony
These are not common to the Philippines, but in some cases you will be asked if you have a child support case from court and need to register it as one of your debt ( if you are the one paying) or income ( if you are the one receiving) Please ask your lender exactly what documentation you need. Some say you need to copy all court records and include all cancelled checks. But, before you copy of years’ worth of paper, they owe it to you to tell you just what they need.
Self-employed or paid by commission
You’ll need to include your pay-related schedules when you copy your tax returns. These pages break down the types of income you earned and help validate your income statements. If you own your own company, you may be asked for a profit and loss statement, balance sheet and corporate tax returns. But, based on your situation, the mortgage company should tell you just how much detail they need.
Bankruptcy
As with child support, not many Filipinos file for bankruptcy legally. But in any case, you have to let the bank or financial institution know of your status. Transparency when it comes to borrowing is always important; any discrepancies will cause denial of your loan. Each lender chooses the how much risk they are willing to take when lending money for real estate. Of course you’ll need to copy any court paperwork, but you may also be asked to write a statement describing why you filed for bankruptcy. The mortgage company should be able to pull a credit report that will show you’ve kept up your good credit standing since completing your bankruptcy
What you need to provide if borrowing from the Government or GOCCs.
In terms of Government loans, for some there are lesser documents you would need to provide in comparison to banks and financial institutions. If you are an existing member of the organization you are borrowing from, it is most likely that you have already provided some of the documents upon applying for a membership.
QUALIFIED BORROWERS:
· Filipino citizens.
· Corporations or entities which are at least 60% owned by Filipinos.
· Corporations or entities which have been operating for at least three (3) years.
· Borrowers who are either gainfully employed or with lawful and profitable business.
· Borrowers with good credit standing.
Here is what you would need:
Land Bank of the Philippines
· Certificates of employment and monthly net take home pay of the borrower.
· Audited financial statements of the business for the last three years.
· Corporate papers duly registered with the Philippine Security and Exchange Commission.
· Bio data of major stockholders of the corporation/entity.
· Financial statements and Income Tax Returns filed with the Bureau of Internal Revenue for the last three years.
· Copy of Torrens Certificate of Title (TCT) for the offered collateral.
· Tax Declaration of the offered collateral.
· Updated Real Estate Tax Payment clearance for the offered collateral.
· Photograph of the offered collateral.
Pag-IBIG Fund
1. Housing Loan Application (2 copies) with recent ID photos of borrower
2. Membership Status Verification Slip (MSVS)
3. Income Documents:
For Locally Employed, any of the following:
· Notarized Certificate of Employment and Compensation (Employer’s format) and for government employees one (1) month pay slip, within 3 months prior to date of loan application
· Latest Income Tax Return (ITR) for the year immediately preceding the date of loan application, with attached W2 form, stamped received by the BIR/Certificate of Tax Withheld (BIR Form No. 2316)
For Self Employed/Other Sources of Income, any of the following:
· ITR, Audited Financial Statements, and Official Receipt of tax payment from bank supported with DTI Registration and Mayor’s Permit/Business Permit
· Commission Vouchers reflecting the issuer’s name and contact details (for the last 12 months)
· Bank Statements or passbook for the last 12 months (in case income is sourced from foreign remittances, pensions, etc.)
· Copy of Lease Contract and Tax Declaration (if income is derived from rental payments)
· Certified True Copy of Transport Franchise issued by appropriate government agency (LGU for tricycles, LTFRB for other Public Utility Vehicle or PUVs)
· Certificate of Engagement issued by owner of business
· Other document that would validate source of income
For Overseas Filipino Workers (OFW), any of the following:
· Employment Contract (with English translation if in foreign language)
· Original Employer’s Certificate of Income (with English translation if in foreign language). If document submitted is photocopy, it shall be duly certified/initialed by Pag-IBIG Fund Information Officer assigned in the country where the member works.
· Other Proofs of Income, whether original or photocopy, shall be duly certified/initialed by Pag-IBIG Fund
Information Officer assigned in the country where the member works.
4. Photocopy (back-to-back) of one (1) valid primary ID of Principal Borrower and Spouse, Co-Borrower and Spouse, Seller and Spouse and Developer’s Authorized Representative and Attorney-In-Fact, if applicable.
5. Authorization to Conduct/Credit Background Investigation
6. For OFW members, Special Power of Attorney notarized prior to date of departure or duly certified and authenticated by the Philippine Embassy or Consulate in the country where the member is staying, if abroad. If
SPA is without the red ribbon of Consulate Office, the SPA must have a duly stamped notarial seal.
7. Insurance Coverage
· Health Statement Form (Medical Questionnaire) OFW members over 60 years old
Loans over P2.0 M to P6.0 M and for borrowers aged up to 60 years old
· Health Statement Form (Medical Questionnaire) and Full Medical Examination Borrowers over 60 years old
8. Marriage Contract (For all married borrower/s, co-borrower/s, spouse, family member/s included on the computation of aggregate income)
9. Birth Certificate or any proof of relationship, if with co-borrower/s or family member/s included on the computation of aggregate income
10. Certified True Copy of Transfer Certificate of Title (TCT) (latest title)
11. For Condominium Unit, Certified True Copy of present TCT and CCT
12. Photocopy of Updated Tax Declaration and Updated Real Estate Tax Receipt
13. Location Plan and Vicinity Map
14. For new member or member with less than the required number of contributions, photocopy of Pag-IBIG Fund
Receipt (PFR) representing lump sum payment of contributions.
15. Approved letter request to re-avail of a Pag-IBIG housing loan (for member/s with housing loan that was foreclosed, cancelled, bought back due to default or subjected to dacion en pago).
For more information about Government loans, click here
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